Financial Planning
Test Questions
Course Introduction
Financial Planning is a comprehensive course designed to introduce students to the fundamental concepts and strategies involved in managing personal and organizational finances. The course covers essential topics such as budgeting, saving, investing, tax planning, retirement planning, and risk management. Through real-world case studies and practical exercises, students develop the skills needed to assess financial goals, create actionable plans, and make informed decisions to ensure long-term financial stability and growth. Emphasis is placed on ethical considerations, financial regulations, and the role of technology in modern financial planning. By the end of the course, students will be equipped with the tools and knowledge necessary to develop and implement effective financial plans for themselves or their clients.
Recommended Textbook
Personal Financial Planning 14th Edition by Randy Billingsley
Available Study Resources on Quizplus
15 Chapters
2516 Verified Questions
2516 Flashcards
Source URL: https://quizplus.com/study-set/3416
Page 2
Chapter 1: Understanding the Financial Planning Process
Available Study Resources on Quizplus for this Chatper
143 Verified Questions
143 Flashcards
Source URL: https://quizplus.com/quiz/67829
Sample Questions
Q1) Effective financial plans should
A)consider your wants and needs.
B)consider your financial resources.
C)reflect your personality.
D)reflect your emotional reactions to money.
E)do all of these.
Answer: E
Q2) A strong economy leads to
A)lower inflation.
B)lower interest rates.
C)higher employment.
D)lower productivity.
E)higher unemployment.
Answer: C
Q3) Utility refers to the amount of satisfaction a person gets from buying certain items.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Using Financial Statements and Budgets
Available Study Resources on Quizplus for this Chatper
166 Verified Questions
166 Flashcards
Source URL: https://quizplus.com/quiz/67830
Sample Questions
Q1) You have a balanced budget when total income for the year equals or exceeds total expenditures for the year.
A)True
B)False
Answer: True
Q2) A liability would be listed on a personal balance sheet as the [amount originally borrowed | amount of the next loan payment to be made | none of these].
Answer: C
Q3) The three parts of your personal balance sheet are
A)income, liabilities, balance.
B)assets, expenditures, balance.
C)assets, liabilities, balance.
D)assets, liabilities, net worth.
E)income, liabilities, net worth.
Answer: D
Q4) Your gross income was $32,000; your net income was $25,000; you saved $1,000.Your savings ratio was [3% | 4%].
Answer: B
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Preparing Your Taxes
Available Study Resources on Quizplus for this Chatper
179 Verified Questions
179 Flashcards
Source URL: https://quizplus.com/quiz/67831
Sample Questions
Q1) As a single taxpayer with no dependents,one is generally eligible to file as "head of household."
A)True
B)False
Answer: False
Q2) Mike is a 19-year-old college student who earned $10,000 and spent it all on his support during the year.His parents may claim him as a tax dependent as long as A)they contribute more than half of his support for the year.
B)he is under 21.
C)he makes under $12,000.
D)he lives at home.
E)all these things are true.
Answer: A
Q3) The federal personal income tax is a flat tax.
A)True
B)False
Answer: False
Q4) The tax year corresponds to the [April 15 filing deadline | calendar year]. Answer: B
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Managing Your Cash and Savings
Available Study Resources on Quizplus for this Chatper
175 Verified Questions
175 Flashcards
Source URL: https://quizplus.com/quiz/67832
Sample Questions
Q1) You put $1,000 into a 12-month certificate of deposit.After seven months,you really need the money.The bank will let you have it before 12 months,but you will pay a penalty.
A)True
B)False
Q2) Credit unions are mainly found in the northeastern United States.
A)True
B)False
Q3) Natalie is faced with two savings choices: Making a single deposit of $5,000 or making five annual deposits of $1,000.The interest rate on both is 4%,compounded monthly.The [lump sum deposit | annual deposits] plan will result in a higher balance at the end of five years.
Q4) Commercial banks are insured by the
A)Financial Deposit Insurance Association.
B)Federal Depositors Assurance Corporation.
C)Federal Deposit Insurance Corporation.
D)Financial Deposit Insurance Company.
E)Federal Demand Deposit Corporation.
Q5) You make a promise to keep funds on deposit for a stated period of time when you open a [MMDA | CD].
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Making Automobile and Housing Decisions
Available Study Resources on Quizplus for this Chatper
179 Verified Questions
179 Flashcards
Source URL: https://quizplus.com/quiz/67833
Sample Questions
Q1) The most popular type of lease is the [closed-end | open-end] lease.
Q2) As a homeowner,you can deduct the mortgage interest and [property taxes | property insurance] if you itemize on your federal taxes.
Q3) An inflation hedge is an asset that increases in value at a rate equal to or greater than the rate of inflation.
A)True
B)False
Q4) The largest single investment you will undertake in your lifetime will probably be the purchase of a house.
A)True
B)False
Q5) There is direct ownership of your living space in a [condo | co-op apartment].
Q6) The biggest fixed cost of owning a car is [the loan payment | insurance].
Q7) Terminating a car lease before expiration is often difficult and costly.
A)True
B)False
Q8) The choice of the index used with an ARM will make [much | little] difference in the volatility of your payment changes.
Q9) A major variable cost of owning a car is [the loan payment | gasoline].
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Using Credit
Available Study Resources on Quizplus for this Chatper
155 Verified Questions
155 Flashcards
Source URL: https://quizplus.com/quiz/67834
Sample Questions
Q1) Before filing for bankruptcy,debtors should consider seeking the help of a credit counselor.
A)True
B)False
Q2) William uses his bank credit card frequently; however,he always pays off the total balance on the card each month.What features should William especially look for in a credit card?
A)Low annual fee and short grace period
B)Low annual fee and low interest rate
C)No annual fee and short grace period
D)No annual fee and long grace period
E)High annual fee and low interest rate
Q3) Paying a loan off much quicker than scheduled is one way to build a good credit rating.
A)True
B)False
Q4) Advantages of balance transfers can include lower interest rates and the convenience of consolidation.
A)True
B)False
Page 8
To view all questions and flashcards with answers, click on the resource link above.
Chapter 7: Using Consumer Loans
Available Study Resources on Quizplus for this Chatper
148 Verified Questions
148 Flashcards
Source URL: https://quizplus.com/quiz/67835
Sample Questions
Q1) College costs have been escalating faster than the overall rate of inflation.
A)True
B)False
Q2) Calculating interest using the [discount | simple interest] method will result in the higher APR on a single-payment loan.
Q3) The purchase of credit life insurance is highly recommended by most financial planning experts.
A)True
B)False
Q4) With the discount method,the finance charges are calculated and then added to the amount borrowed.
A)True
B)False
Q5) Collateral is an item of value used to secure the principal portion of a loan.
A)True
B)False
Q6) Students borrowing to pay for college should base the amount borrowed on [current income | expected future salary].
Q7) There are now about [$5.3 billion | $1.2 trillion] in student loans outstanding.
Page 9
To view all questions and flashcards with answers, click on the resource link above.
Chapter 8: Insuring Your Life
Available Study Resources on Quizplus for this Chatper
151 Verified Questions
151 Flashcards
Source URL: https://quizplus.com/quiz/67836
Sample Questions
Q1) In order to predict accurately the number of losses that will occur in a given time,insurance companies must study [large | small] numbers of cases.
Q2) Through insurance,society is able to
A)reduce costs.
B)increase rewards.
C)reduce financial risks and share losses.
D)change financial risks and reduce losses.
E)anticipate risks.
Q3) The waiver-of-premium benefit excuses premium payment while the insured is experiencing short-term illness.
A)True
B)False
Q4) Universal life insurance is
A)a deferred premium payment policy.
B)primarily sold to college students.
C)a combined investment plan and insurance policy.
D)a provision for a secondary beneficiary.
E)all of the above.
Q5) If a loss is certain to occur,there is [a | no] risk.
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Insuring Your Health
Available Study Resources on Quizplus for this Chatper
148 Verified Questions
148 Flashcards
Source URL: https://quizplus.com/quiz/67837
Sample Questions
Q1) An Individual Practice Association differs from an HMO in that
A)you have no choice of the physician.
B)they are located in a central facility.
C)associated doctors operate from their own offices.
D)they are less likely to be found in small communities.
E)none of these.
Q2) In order to qualify for disability insurance under social security,a person must be
A)unable to carry out the duties of the current job.
B)unable to carry out the duties of any job.
C)ill for at least two years.
D)willing to undergo rehabilitation.
E)none of these
Q3) ____ are required by many insurance plans to reduce the number of unnecessary surgeries.
A)Deductibles
B)Waiting periods before the surgery is performed
C)Second opinions
D)Meetings with company surgical committees
E)Approval by hospital surgical committees
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Protecting Your Property
Available Study Resources on Quizplus for this Chatper
168 Verified Questions
168 Flashcards
Source URL: https://quizplus.com/quiz/67838
Sample Questions
Q1) Property insurance is meant to protect property owners from two basic types of exposures,physical loss of property and loss through depreciation.
A)True
B)False
Q2) The advisable dollar coverage for any one auto accident is at least [$100,000 | $300,000].
Q3) Actual cash value is calculated by subtracting depreciation from the [purchase price | replacement cost] of an item.
Q4) All property insurance companies require you to show the following when making a claim:
A)Proof of loss
B)Personal property inventory
C)Values at the time of inventory
D)All of the above.
Q5) An HO-2 policy will protect your property from losses due to [all perils except those listed | listed perils only].
Q6) The theft of your favorite jacket from your locked car [would be | would not be] taken care of by your renter's policy.
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Investment Planning
Available Study Resources on Quizplus for this Chatper
162 Verified Questions
162 Flashcards
Source URL: https://quizplus.com/quiz/67839
Sample Questions
Q1) The New York Stock Exchange is a dealer market.
A)True
B)False
Q2) The term "investment' refers to money placed in some medium where value and level of return are totally unpredictable.
A)True
B)False
Q3) The axiom that explains diversification is [Don't cry over spilt milk | Don't put all of your eggs in one basket].
Q4) Which of the following is an order to sell a stock when the market price drops to or below a specified level?
A)Market order
B)Limit order
C)Stop-loss order
D)Fill or kill order
E)Day order
Q5) The owner of a bond would expect to receive [steady | variable] annual income.
Q6) Using margin will magnify [only gains | only losses].
Q7) Fifty shares of stock would constitute [an odd lot | a round lot].
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Investing in Stocks and Bonds
Available Study Resources on Quizplus for this Chatper
184 Verified Questions
184 Flashcards
Source URL: https://quizplus.com/quiz/67840
Sample Questions
Q1) Income stocks are similar to bonds in that they pay annual interest to owners.
A)True
B)False
Q2) Assume you're contemplating the purchase of a $1,000,6% annual coupon income bond with 5 years remaining to maturity and that the bond currently is trading at $950.The approximate yield to maturity on this bond will be
A)6.0%.
B)7.2%.
C)8.1%.
D)11.3%.
E)12.1%.
Q3) Only the shares of the strongest,most stable,and safe-return companies can be called
A)blue-chip stocks.
B)growth stocks.
C)income stocks.
D)defensive stocks.
E)cyclical stocks.
Q4) You are looking for a guaranteed steady stream of income; you should invest in [stocks | bonds].
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Investing in Mutual Funds
Available Study Resources on Quizplus for this Chatper
176 Verified Questions
176 Flashcards
Source URL: https://quizplus.com/quiz/67841
Sample Questions
Q1) Dividend income and capital gains distributions are taxed at identical tax rates.
A)True
B)False
Q2) The primary purpose of investing in income property is to produce an attractive annual cash flow.
A)True
B)False
Q3) Which of the following are characteristic of exchange-traded mutual funds?
A)Traded on listed exchanges
B)Closed-end funds
C)Generally organized as sector funds
D)Actively managed funds
E)All of these
Q4) A mutual fund's NAV is calculated
A)annually.
B)monthly.
C)at least once a day.
D)hourly.
E)none of these.
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Planning for Retirement
Available Study Resources on Quizplus for this Chatper
205 Verified Questions
205 Flashcards
Source URL: https://quizplus.com/quiz/67842
Sample Questions
Q1) The employer retirement plan that is intended to promote employee productivity and allows the employer to vary the amount of annual contributions is a
A)qualified defined contribution plan.
B)thrift and savings plan.
C)profit sharing plan.
D)401(k) plan.
E)403(b) plan.
Q2) If one is unsure about the facts needed to estimate retirement needs,it is better to do nothing for a few years.
A)True B)False
Q3) A person who is self-employed on a part-time basis can qualify for a Keogh account.
A)True B)False
Q4) The cash-balance retirement plan is being used to replace traditional defined benefit plans.
A)True B)False
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Preserving Your Estate
Available Study Resources on Quizplus for this Chatper
177 Verified Questions
177 Flashcards
Source URL: https://quizplus.com/quiz/67843
Sample Questions
Q1) A letter of last instruction might provide directions for A)location of the will.
B)legal and accounting services.
C)explanation of the actions taken in the will.
D)suggestions on how to divide personal property.
E)all of these.
Q2) An estate plan is good only as long as it fits the needs,desires,and circumstances of the parties involved.
A)True
B)False
Q3) The best choice for a trustee is a family member.
A)True
B)False
Q4) A potential estate planning problem is improper distribution of assets.
A)True
B)False
Q5) If a person dies intestate (without a valid will),the estate is distributed according to established state laws of intestate succession.According to Utah's probate code (as described in Exhibit 15.4 of your textbook),what is the estate distribution for a spouse with no offspring?
17
To view all questions and flashcards with answers, click on the resource link above.